News

Microsoft: Windows 7 Sells 90 Million Copies

• By Anne Watkins
• 03/02/2010

Microsoft reported sales of 90 million copies of Windows 7 at the Morgan Stanley Technology, Media & Telecom Conference on Tuesday.

The 90-million sales figure, announced by Microsoft Chief Financial Officer Peter Klein at the San Francisco-based event, represented a significant increase over a previous report. In late January, Microsoft indicated that 60 million Windows 7 licenses had been sold through the end of its fiscal second quarter.

Klein said that there was a continuing momentum for Windows 7, which he called the "fastest selling operating system in history." He made similar comments during Microsoft's 2Q announcement.

Current Windows 7 sales figures are largely from retail and consumer purchases, but Klein said that he expects enterprise purchases to surge as IT spending improves and refresh cycles take place. Consumer sales of Windows 7 were launched in October 2009.

For FY10 H1, Microsoft had overall revenues of $31.9 billion (+1 percent year over year) and operating income of $13 billion (+9 percent year over year).

Klein emphasized that Microsoft was focused on cost discipline and prioritizing investments, which he said has become sustained and philosophical, rather than a temporal solution to the economy. "As the market recovers, that gives us great leverage as we maintain control of our cost structure," he said.

Although the server market was particularly hard hit by lower IT spending, that business has continued to grow. "Even during the downturn, we were increasing, which shows an underpinning for growth," Klein said.

Encouraging factors for the immediate outlook include an expected increase in IT spending, the strength of Windows 7 sales, hardware innovations by OEMs, emerging markets and the beginning of enterprise deployment during refresh cycles, Klein said.

Klein's prepared statement focused on the consistency and comprehensiveness of Microsoft's upcoming products. "We feel very well positioned from a product perspective in the second half of the year" he said, highlighting the importance of the Internet cloud for Microsoft's future.

For the Xbox gaming console, Klein projected three drivers for growth over the next 12 to 18 months: Project Natal, the Halo game release and platform building with Xbox Live.

In addition, he said that there were several core elements that position Microsoft for success with its smartphone, including design, working harder and more consistently with hardware developers (he noted that past efforts were "wild and open") and the capability to offer a comprehensive set of services.

Klein also announced that Microsoft will launch the Office Tech Guarantee program before the end of March. The program is expected keep up new sales of Office 2007 by offering free upgrades to Office 2010 when it is released for general availability.

An audio Webcast of Klein's talk can be accessed at the Microsoft investor relations Web site here.